EUR/GBP clings to gains near 6-week tops after EZ data

The shared currency continued with its outperformance against the British Pound, lifting the EUR/GBP cross to its highest level since April 11.

Spot continued gaining traction after the preliminary Euro-zone GDP for the first quarter of 2017 matched consensus estimates and recorded a steady growth of 0.5% q-o-q, with the yearly growth rate also holding stable at 1.7%. 

Adding to the positive GDP print, Euro-zone trade balance rose less-than-expected, at €23.1 billion for March as against €26.5 billion expected and €17.8 billion recorded in the previous month. 

The positive effect, to some extend seems to have been capped by a slightly disappointing German ZEW economic sentiment index, coming in at 20.6m for May as compared to 22.0 expected and failed to provide an additional boost to the shared currency. 

Meanwhile, market seems to have largely ignored upbeat release of the latest inflation figures from the UK, with the sentiment surrounding the common currency acting as an exclusive driver of the pair's bullish momentum to six week tops.

Technical levels to watch

Currently trading above mid-0.8500s, immediate resistance is pegged near 0.8575-80 region, above which the cross seems all set to reclaim the 0.8600 handle and head towards testing its next major hurdle near mid-0.8600s.

On the downside, 0.8535-30 area now become immediate support to defend, which if broken might trigger a corrective slide back towards the key 0.85 psychological mark, en-route 0.8460-55 strong horizontal support.